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The impact of information on patient preferences in different delivery patterns: a contingent valuation study of prescription versus OTC

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Title: The impact of information on patient preferences in different delivery patterns: a contingent valuation study of prescription versus OTC


1
The impact of information on patient preferences
in different delivery patterns a contingent
valuation study of prescription versus OTC
Karine Lamiraud, Konrade von Bremen, Cam
Donaldson University of Lausanne, Institute
of Health Economics and Management (IEMS),
DEEP-HEC Institute of Health and Society,
Newcastle University, UK
2
INTRODUCTION
1. Background
  • Increasing interest in the use of CV for
    measuring WTP
  • CV
  • methods

2. Major concern
  • Influence of additional information (Tversky
    Kahneman, 1981)

The impact of the level of information on WTP
may depend upon the delivery mechanism. This has
not been assessed yet.
3
INTRODUCTION
2. Objectives
  • This study aims at assessing the impact of
    information on preferences in different delivery
    patterns (prescription versus OTC systems)

4
INTRODUCTION
3. Policy relevance
  • This investigation is driven by the fact that
    many countries have expanded efforts to move
    prescribed drugs onto OTC status
  • Previous works have focused on assessing the
    change in benefits using a consumer surplus
    approach based on observed demand curves (Ryan
    and Yule, 1990 Temin, 1983 Shih et al., 2002)
  • However, the methods employed were not able to
    test the susceptibility of benefits to the level
    of information
  • A CV approach is used

5
Outline
  • Theoretical background
  • WTP study
  • Empirical analysis

? Results
? Conclusion
6
THEORETICAL FRAMEWORK
1. Theoretical framework
Two simple uses of well-known economic theories
help us derive two hypotheses
  • Agency and Information
  • ? information hypothesis
  • Demand theory and the impact of moving to OTC
  • switching hypothesis

7
THEORETICAL FRAMEWORK
2. Agency and Information
  • When visiting a doctor, the patient may mostly
    rely on the doctors knowledge
  • Opting for an OTC medicine requires full
    individual choice and self-administration

Information assumption
? The impact of information on WTP will be more
significant in the OTC scenario than in the
prescription one
8
THEORETICAL FRAMEWORK
3. Demand theory
  • The figure depicts the demand curve for the case
    of a hypothetical drug
  • The cost of the drug is assumed to be fully borne
    by the consumer
  • We assume that POTC lt Pp (Ryan and Yule, 1990)

Cost
9
THEORETICAL FRAMEWORK
4. Switching assumption
(S1) the total WTP is expected to be higher in
the OTC scenario than in the prescription
one (S2) more 0 answers are to be expected in
the prescription scenario (S3) if zero answers
are excluded WTP is expected to be higher in the
prescription scenario
Cost
A
B
C
 
QOTC
Qp
O
Number of consumers
10
THEORETICAL FRAMEWORK
5. A test of the validity of the CV approach
? Through basing our analyses on the assumptions
arising from these theories, a useful (and new)
test of the validity of the CV approach is thus
provided
11
DATA
1. WTP Study
These effects will be assessed within a study
measuring patient preferences concerning a new
class of drugs in influenza disease
Neuraminidase Inhibitors (NAIs)
  • They offer symptom reduction by 1.5 days
  • Since their release, NAIs have been prescription
    drugs
  • Due to benign side effects, they might also
    qualify for OTC
  • A CV study was performed to compare
    preferences between both delivery systems. It
    took place in the French speaking part of
    Switzerland (winter 2001, summer 2001)

12
DATA
2. General information to all study participants
All participants were first provided with some
information on influenza as it was considered
that respondents should have a comparable
understanding of the disease
  • Influenza is in general a benign disease
  • Self-limited to 5-7 days
  • Symptoms fever cough and runny nose with
    sudden appearance
  • Risk of complications for children, the old and
    frail, and chronically ill
  • Vaccination is available
  • Vaccination does not give a complete protection
    against influenza.
  • Big economic impact due to influenza
  • Pandemic outbreak can be disastrous to the country

13
DATA
3. Testing for informational effect
Respondents were randomly assigned into basic or
extended information
Basic Information
Extended Information
  • able to reduce symptom by 1.5 days
  • needs to be taken within 48 hours after onset of
    symptoms
  • side effects are very mild
  • not able to prevent/cure the flue
  • not active against cold
  • does not replace vaccination
  • is not active out of the period of influenza
    epidemics of about 4 months
  • able to reduce symptom by 1.5 days
  • needs to be taken within 48 hours after onset of
    symptoms
  • side effects are very mild

14
DATA
4. WTP questionnaires
After being provided with some information all
respondents were asked to imagine that they were
affected by influenza and to answer 2 WTP
questions framed into 2 scenarios
  • First scenario
  • Second scenario
  • How much are you willing to pay for a
    prescription drug which is able to reduce the
    duration of the flue by 1.5 days?
  • This drug is not reimbursed, the consultation
    would need to be paid for
  • How much are you willing to pay for an OTC drug
    which is able to reduce the duration of the flue
    by 1.5 days?
  • This drug can be bought without restriction in
    the pharmacy

15
DATA
5. Bidding ranges
A payment card system was used to facilitate
answers


Frs 0






Frs. 1
-
20





Frs. 21
-
40





Frs. 41
-
60





Frs. 61

80





Frs. 81
-
100





Frs. 101

150





Frs. 151
-
250





Frs.
251

500.


-




Frs. 501
-
1'000





More than Frs.1'000






  • To exclude starting point bias the order of
    ranges was randomized (increasing or decreasing)

16
Outline
  • Theoretical background
  • WTP study
  • Empirical analysis

? Results
? Conclusion
17
EMPIRICAL ANALYSIS
1. Overview of empirical strategy
The empirical analysis aims at testing the
information and switching hypotheses. We
conducted 3 main analyses.
  • We examined the factors associated with WTP
  • - information level in the OTC and
    prescription scenario (I)
  • - scenario (S1)
  • We examined consistency with S2 via the
    distribution of zero answers between both the OTC
    and prescription scenarios
  • We investigated the distribution of non zero
    answers between the OTC and the prescription
    scenario in order to test S3

18
EMPIRICAL ANALYSIS
2. Econometric model
i
The individual
t
The scenario (s prescription vs OTC)
The respondents true valuation for scenario t
Information level (I 0,1 ie extended vs basic)
Explanatory factors (socio-demographic and health
status variables.)
  • A finding that would be
    consistent with the information assumption
  • Based on S1, is expected to be positive
    and significant

19
EMPIRICAL ANALYSIS
3. Selection of covariates
The selection of covariates included testing
whether covariates had a different impact on WTP
for the prescription and OTC drugs
The following equality tests were then performed
20
EMPIRICAL ANALYSIS
4. Econometric estimation
We fitted a random-effects interval censored
regression model
  • Answers lie in intervals and are not point
    estimates The respondents true valuation known
    to lie within the interval defined by lower and
    upper thresholds
  • Answers might be correlated for a given
    individual

Assumptions
  • Zero answers can be considered as very small
    WTP (0,1)
  • A lognormal conditional distribution for
    valuations is proposed
  • log lie between log ta and log tb
    except for the first and last intervals

Cameron James, 1986 Cameron Huppert,
1989
21
RESULTS
1. The study population
Information level Basic Extended p Information level Basic Extended p Information level Basic Extended p
Females () Age (mean, std) Mandatory school () High school () Skilled training () University () Working () Physician Health care professional () Non physician Health care professional () 55.8 35.4 12.1 6.4 10.8 49.7 33.0 90.3 14.6 52.0 55.9 35.5 6.5 11.5 50.0 32.0 90.1 13.1 53.5 55.8 35.4 6.3 10.1 49.5 34.1 90.4 16.0 50.6 0.7 0.7 0.43 0.6 0.1
Supplementary insurance () Perfect subjective health status () Vaccinated against flue () 49.4 74.0 29.9 48.4 74.4 29.9 51.4 73.8 29.6 0.80 0.90
Administered in winter time () Basic information level () 56.2 49.5 55.9 56.4 0.80
1594 subjects were enrolled in the study
22
RESULTS
2. WTP descriptive statistics
Willingness to Pay for influenza symptom
reduction by 1.5 days
  • People receiving extended information were more
    willing to pay for the drug
  • However this tendancy is significant in the OTC
    scenario only (at a 10 level)

23
RESULTS
3. Econometric results
Panel interval regression estimations over the
full range of responses
24
RESULTS
4. Information impact
  • An increased level of information
  • pushes the WTP to upper levels in the OTC
    scenario
  • has no impact on the WTP for prescription
    medicine
  • When asking for medical advice, the patient
    relies on the doctors knowledge
  • When opting for OTC, the patient requires
    relevant information to make informed choices
  • This is in line with the information assumption

25
RESULTS
5. Other results
the WTP increases
Delivery patterns
  • when the participant answers the survey during
    the winter
  • with incomes (assuming education level is a
    proxy for income)
  • if respondents are risk averse (as expressed by
    being vaccinated)
  • the insurance coverage does not influence the WTP

? the WTP increases when the drug is delivered
OTC (S1)
26
RESULTS
6. Discussion (1)
We must discuss the possibility that some people
might have thought that the OTC drug had to be
sold at a higher price for some reason
  • some costs can be avoided ?
  • However, physicians value the OTC drug (not the
    prescription one) as much as the general
    population does
  • (phsyisicans, however, do not face the same
    issues as time or money to get a prescription)
  • misunderstanding ?
  • It is unlikely that the seriousness of the
    disease has been underestimated

27
RESULTS
9. Discussion (2) a sequence effect?
The prescription form of the drug could have
benefitted from a sequence effect (WTP is
expected to be larger for the first good of a
series of good, Payne et al 2000)
  • ?Our methodology does not allow us to assess
    whether a sequence effect is present or not
  • However we claim that our findings are not
    affected by a sequence effect if there is one
  • If such an effect were present, our current
    results suggesting that the OTC version is
    preferred would even be reinforced

28
RESULTS
8. Discussion (3) protest zeros?
We also checked whether some 0 answers could
be attributable to protest zeros
  • ?A probit model was estimated on the subgroup of
    those who answered 0 to both scenarios
  • A bivariate probit model was run on the
    propensities to pay for a prescription and OTC
    drug

Some people may not feel concerned or express
aversion to contributing to a publicly funded
health care system
29
RESULTS
8. Discussion (4) protest zeros?
Probit model explaining zero answers to both
scenarios
  • People declaring zero values to both scenarios
    cannot be regarded as protesters

30
CONCLUSION
1. Policy issue
  • Our results
  • ?Welfare gains are associated with switching to
    OTC
  • ?The benefits of switching to OTC status are
    likely to depend on the information level
  • For the kind of drug considered here (safe and
    easy to monitor), the requirement for patient
    decision making is the provision of comprehensive
    information

31
CONCLUSION
2. Validity of the CV approach
  • One important contribution of the study was to
    use the CV method to assess the benefits from OTC
    while previous studies were based on market
    behaviors of actual consumers
  • We provide a useful test of the validity of the
    CV approach given that all the results come out
    in line with predictions from the agency and
    demand theories
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